Thursday, August 5, 2010

Sarkozy vs. Merkel

I never expected to read about cognitive dissonance in The Economist, but below are excerpts from a recent article that refers to the cognitive science term.

Incidentally, the well-written (albeit (arguably) unfairly anti-French) analysis of Berlin-Paris relations is also relevant to yesterday's post about Germany's economic recovery.

The Neighbors Fall Out - The Economist

« Diplomatic stagecraft is a fine art, complete with its own lexicon of codes and cues. To hold a “frank discussion” is to row. To “welcome the recommendations” is to drop such advice crisply into the waste-paper bin. In French diplomatic speak, the word naturellement is usually followed by an assertion that is anything but. Games of appearance are the daily routine of diplomacy. But two conflicting versions cannot both, in the long run, be true. When it comes to its dealings with Germany, France is suffering from what psychologists call cognitive dissonance.

Consider the row over economic government. The French want to concoct a euro-zone block, with a direct line to the European Central Bank and fiscal harmonisation. The Germans reject this. They insist on a wider grouping, backed by strict budgetary discipline, and harsh sanctions for bad behaviour.

Insults are being lobbed back and forth across the Rhine. The French cannot stop themselves from provoking the Germans. Mr Sarkozy claimed that the €750 billion euro-zone rescue plan was “95% French”; Pierre Lellouche, his junior Europe minister, slipped in a reference to Auschwitz when talking about the bail-out. For her part, Ms Merkel vexed the French by unilaterally banning naked short-selling, then springing an austerity plan just as the French were urging more stimulus. The pair could not even agree on whose fault it was that their meeting in Berlin last month was cancelled just a few hours before Mr Sarkozy was due to leave Paris.

French officials seem unable to accept that such differences might be serious. Yet they are. The balance of power between the two countries has shifted. Germany and France are no longer shoulder-to-shoulder equals. This is particularly hard for France. Put simply, its Europe policy has long consisted of coming up with the ideas, and getting the eager-to-please Germans to pay for them. More Europe, in other words, has meant more France. But this equation may no longer hold.

The shift is partly economic. In 1999-2009 France’s share of EU exports shrank while Germany’s grew; last year the Dutch exported more than the French. The Germans have put up with meagre pay rises and tight budgets to keep their cutting-edge industry competitive and public finances in order, whereas the French have put off serious reform and built up huge public debt, while working shorter weeks and taking more holidays. Germany sees no reason why it should be told what to do by a country that has not made much effort itself.

Another factor is a political change in Germany. As Wolfgang Proissl argues in a forthcoming paper for Bruegel, a think-tank, the euro-zone crisis has exposed the cold reality that Germany is the power in Europe that counts the most. Top brass in Brussels, or Paris, can talk as much as they like. But until Ms Merkel agrees, nothing happens. Fully 20 years after reunification, Germany is asserting its interests as the union’s chief paymaster, and no longer feels the need to please. “You can’t call it the Franco-German couple any more”, laments a French former foreign minister, “because Germany has found its place as Europe’s number one.”

Add to this combustible mix two leaders who do not understand each other, nor each other’s culture, nor even each other’s language. The steely, methodical Ms Merkel thinks that the French president lets politics triumph over rules. The mercurial, hyperactive Mr Sarkozy considers the German chancellor to be impossibly hesitant and legalistic. Germany’s federal system and culture of checks and balances deliberately brakes swift central decision-making. France’s dirigiste tradition and strong presidency means that Mr Sarkozy can do pretty much what he likes. “To make Sarkozy wait ten minutes is impossible,” sighs one Brussels official: “So he has the impression she’s slow; but she’s German.”

Picking a fight with the other may also suit, because each is in trouble at home. Ms Merkel needs to show German voters that she is not being bossed about by the French president. Mr Sarkozy, whose poll ratings have dropped to a record low, wants to prove to French voters that he still counts in Europe—and in the world, when he inherits the G20 presidency in November. It may yet be that, over narrow questions of running the euro, the pair will strike a partial bargain, just as their predecessors did. But any carefully staged reconciliation, complete with professions of granite-like unity, is bound to mask differences that will at some point emerge again. So doubt all talk of harmony, and above all beware any French declaration that begins: naturellement. »